The Digital World of Green Coffee: Can Online Direct Trade Platforms Change the Face of Power and Governance within the Global Value Chain?

Zoey Allen-Knobler

Student thesis: Master thesis

Abstract

This thesis aims at understanding how reconfigurations of the Global Value Chain (GVC) of coffee through the usage of Online Direct Trade Platforms (ODTPs) may lead to changes in power & governance for actors along the value chain. Additionally, it attempts to outline potential advantages, opportunities as well as disadvantages of ODTP usage from the perspective of coffee producers and roasters. It also outlines several barriers producers may face in accessing, using and growing their businesses through ODTPs. These research questions are highly important as today the real price of coffee has seen major decreases in recent years and the power of lead roasters paired with industry conditions has led to unequitable value capture for producers. These factors contribute to the overall uncertainty facing millions of coffee producers worldwide and the sustainability of the industry (Macgregor, Ramasar, & Nicholas, 2017; Panhuysen & Pierrot, 2019). To answer these research questions a theoretical review was first conducted to collect and analyze important literature in relation to GVCs including power, governance, upgrading, direct trade and regarding today’s digital landscape. Following this, an empirical study was carried out. The empirical research draws on 18 qualitative semi-structured interviews with roasters, online direct trade platforms and an industry expert. This is followed by a structured summary of the results and a discussion of the key empirical findings and how they relate to power. The findings are inconclusive as to whether ODTPs will inspire shifts in power back in the hand of producers, as the findings list both opportunities that will help producers, such as higher bargaining power stemming from price transparency and market access, improved possibilities for functional upgrading and could even go as far to inspire lead firms towards more sustainable and fair practices. On the other hand, several limitations were raised, such as ODTPs ability to structurally change the industry as users of these platforms are primarily operating in the specialty market. It also raises concerns that today’s unjust marketplace will replicate online. It goes even farther also, as it outlines situations in which roasters and platforms may even be better suited to capture more power in an online environment, for example through mergers. This study also contributes by including numerous suggestions relating to future research and may lead to practical implications stemming from an improved understanding of ODTPs when creating policy and regulations at an institutional level. It may also be useful in inspiring platforms in ways to make their offerings and features more inclusive for producers and more advantageous for roasters. Finally, it may also offer roasters ways to improve their understanding of ODTPs.

EducationsMSc in Business, Language and Culture - Business and Development Studies, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages112
SupervisorsStefano Ponte